From Day-Ahead to a 6-Hour Period-Ahead Market Adapted to the Stochastic Behaviour of Variable Energy Renewable Sources

Couto, António; Algarvio, Hugo; Lopes, Fernando; Estanqueiro, Ana; Santos, Gabriel; Lezama, Fernando; Faia, Ricardo; Carvalho, Rui; Vale, Zita

http://hdl.handle.net/10400.9/6075

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Abstract(s)

ABSTRACT: The existing electricity market design challenges the fair and competitive participation of variable renewable energy sources (vRES) due to their weather dependence and limited forecasting accuracy, especially for long-time horizons, as required in the day-ahead market (DAM). These challenges impact market clearing prices and create imbalances, leading to inefficiencies, such as market-splitting events. To enhance the market efficiency and fairness for vRES producers, this work proposes a period-ahead market (PAM) with a 6-hour rolling horizon instead of the traditional 24-hour DAM. A case study of the Iberian electricity market with 2030 energy mix scenarios for Portugal and Spain, demonstrates that, in PAM, vRES producers can reduce wind and solar power forecast errors by over 7 % and 4 %, respectively, when compared with DAM. This leads to a 2 % decrease in electricity prices and an annual reduction of marketsplitting events in 158 hours thus enhancing price harmonization between Portugal and Spain. Additionally, balancing prices also decreased in PAM benefiting the balance responsible parties. The findings highlight that PAM improves the market's efficiency, a key factor in the pathway for the decarbonization of power systems.

Keywords

Electricity markets Variable renewable energy sources Renewable energy sources Forecast Power systems Low carbon energy

URI

http://hdl.handle.net/10400.9/6075

Citation

Couto, A., Algarvio, H., Lopes, F., Estanqueiro, A., Santos, G., Lezama, F., Faia, R., Carvalho, R. & Vale, Z. (2025). From Day-Ahead to a 6-Hour Period-Ahead Market Adapted to the Stochastic Behaviour of Variable Energy Renewable Sources. In: 21st International Conference on the European Energy Market (EEM), Lisbon, Portugal, 27-29 May, 2025, pp. 1-6. https://doi.org/10.1109/EEM64765.2025.11050295